Gas Tankless Water Heaters Market
The market for Gas Tankless Water Heaters was estimated at $1.5 billion in 2024; it is anticipated to increase to $2.4 billion by 2030, with projections indicating growth to around $3.6 billion by 2035.
Report Summary
Market Data
Methodology
Table of Contents
Global Gas Tankless Water Heaters Market Outlook
Revenue, 2024
$1.5B
Forecast, 2034
$3.3B
CAGR, 2025 - 2034
8.3%
The Gas Tankless Water Heaters industry revenue is expected to be around $1.6 billion in 2025 and expected to showcase growth with 8.3% CAGR between 2025 and 2034. This significant expansion in the Gas Tankless Water Heaters market can be attributed to a myriad of factors, such as accelerating demand for energy-efficient appliances, rising environmental concerns, and insistence on reducing utility costs. As the world grapples with energy scarcity and the effects of climate change, the importance of gas tankless water heaters - which offer high efficiency and considerable energy savings - has never been more pronounced. Emerging regulatory policies favoring green appliances have also contributed to this surge, with the introduction of incentives and subsidies providing a substantial boost to theindustry'sdevelopment.
Gas Tankless Water Heaters operate on an on-demand principle, heating water only when required thereby eliminating the need for extended storage and consequent standby losses. These heaters high thermal efficiency, compact design, and longer lifespan compared to their traditional counterparts are features that have enhanced their adoption significantly. Major applications span across residential, commercial and industrial sectors, with the residential segment accounting for a lions share due to increasing consumer emphasis on energy efficiency and green building practices.
Market Key Insights
- The Gas Tankless Water Heaters market is projected to grow from $1.5 billion in 2024 to $3.3 billion in 2034. This represents a CAGR of 8.3%, reflecting rising demand across Residential, Commercial and Industrial.
- Rinnai Corporation, Navien Inc., Rheem Manufacturing Company are among the leading players in this market, shaping its competitive landscape.
- U.S. and Japan are the top markets within the Gas Tankless Water Heaters market and are expected to observe the growth CAGR of 6.1% to 8.7% between 2024 and 2030.
- Emerging markets including India, Brazil and South Africa are expected to observe highest growth with CAGR ranging between 8.0% to 10.4%.
- Transition like Increased Energy Efficiency is expected to add $104 million to the Gas Tankless Water Heaters market growth by 2030.
- The Gas Tankless Water Heaters market is set to add $1.8 billion between 2024 and 2034, with manufacturer targeting Hospitality & Healthcare End Use projected to gain a larger market share.
- With Energy efficiency revolution, and Rapid urbanization and infrastructural development, Gas Tankless Water Heaters market to expand 122% between 2024 and 2034.
Opportunities in the Gas Tankless Water Heaters
In an increasingly globalized world, strategic collaborations and partnerships with global brands offer a lucrative market for Gas Tankless Water Heaters. Manufacturers can also consider tying up with prominent construction and real-estate companies, offering these energy-efficient water heaters as a premium and sustainable solution in new constructions. This synergy can create a win-win situation, expanding the reach of Gas Tankless Water Heaters to a larger consumer base and promoting sustainable living. Market Expansion in Developing Countries
Growth Opportunities in North America and Europe
In the North American market, the adoption of gas tankless water heaters is escalating considerably due to increasing energy efficiency regulations and the rising desire for cost and energy saving solutions among consumers. The United States leads the market with a high demand for these appliances, propelled by favorable government incentives and increasing consumer awareness about the impact of conventional water heaters on the environment. The competitive landscape in this region is driven by premium quality and technologically advanced features offered by major players, with companies like Rheem Manufacturing and Rinnai Corporation setting the market trends. A significant market driver in this region is the rising number of smart homes, increasing the potential for smart gas tankless water heaters integrated with advanced technologies like IoT.
Europe represents another significant market for gas tankless water heaters, largely backed by burgeoning demand from countries like Germany, the United Kingdom, and France. Brought about by escalating awareness regarding energy conservation and strong policy support to promote energy-efficient appliances, the uptake of these heaters is seeing a steady rise. The European market is highly competitive, with key players including Ariston Thermo Group and Vaillant Group extensively focusing on product innovation, thereby enhancing customer preferences for feature-rich and high-performing heaters.
Market Dynamics and Supply Chain
01
Driver: Energy Efficiency Revolution, and Technological Advancements and Innovations
The adoption of energy-efficient appliances is also today's growing trend, driving the market for gas tankless water heaters. As these heaters use gas to heat water only when needed, they are also significantly more energy-efficient compared to traditional water heaters, making them a popular choice among environment-conscious users. The introduction of technically advanced gas tankless water heaters, with automated temperature control and self-modulation capabilities, is also an additional in this market. These sophisticated functionalities ensure optimal utilization of energy resources, aligning with the trend of smart homes and buildings, and hence, promoting the market growth of gas tankless water heaters.
Rapid urbanization across the globe has also catalyzed the infrastructural development of residential and commercial sectors. This progression has also increased the demand for gas tankless water heaters due to their compact size and advanced features, capable of meeting the requirements of modern infrastructures.
02
Restraint: High Initial Cost
While gas tankless water heaters provide long-term energy and cost savings, their high initial investment cost is a significant in the market. Many potential customers hesitate to bear this upfront expenditure, especially when cheaper alternatives like storage water heaters are available. This challenge is even more pronounced in developing economies where consumers are particularly cost-sensitive. Additional installation expenses for upgrades or conversions from traditional to tankless systems can pose a deterrent to consumer adoption.
03
Opportunity: Advancing Energy Efficiency
With the growing emphasis on energy conservation, the market for Gas Tankless Water Heaters presents a significant in advancing energy efficiency. The modern technological innovations in this industry are directed towards making these heaters more energy-efficient, reducing operational costs, and minimizing their carbon footprint. This primarily untapped market segment holds massive growth potential in the residential and commercial sectors. The narrative of conservation is now stronger than ever, and the Gas Tankless Water Heaters industry is well-positioned to take advantage of this shift in consumer behavior.
04
Challenge: Complex Installation Process
Another key market constraint for gas tankless water heaters lies in their complex installation process. Installing these systems necessitates professional expertise due to factors like required venting and the handling of gas lines, which inevitably increases installation costs. Meanwhile, traditional water heaters or electric models offer easier setups, attracting a broader consumer base. These complexities inhibit the widespread adoption of gas tankless water heaters, directly affecting market dynamics and demand.
Supply Chain Landscape
1
Materials Procurement
BHP BillitonRio Tinto
2
Component Production
Burner Systems InternationalSit Group
3
Assembly
RinnaiNoritz
4
Retail & Distribution
LowesHome Depot
1
Materials Procurement
BHP BillitonRio Tinto
2
Component Production
Burner Systems InternationalSit Group
3
Assembly
RinnaiNoritz
4
Retail & Distribution
LowesHome Depot
Use Cases of Gas Tankless Water Heaters in Residential & Commercial
Residential : Gas tankless water heaters are ideal solutions for residential spaces due to their compact design and energy-efficient properties. They are primarily used to provide instant hot water on demand, eliminating the waiting time and energy wastage of traditional storage water heaters. Residential models, offered by leading market players such as Rheem and Rinnai, deliver unparalleled continuous hot water supply, making them a perfect choice for large households.
Commercial : These heaters are also increasingly being recognized for their capacity to support commercial operations such as hotels, restaurants, and office buildings. High-capacity gas tankless water heaters, like those developed by Navien, can address the high-demand hot water requirements of these venues. Their major advantage is they provide a steady hot water supply, even amidst peak usage times, thus ensuring consistent service to customers and enhancing overall operational efficiency.
Industrial : On the industrial front, gas tankless water heaters find applications in industries such as manufacturing, pharmaceuticals, and food processing where a large volume of hot water is routinely required. Heaters from companies such as Bosch and Noritz are renowned for their durability, high output, and consistency, able to meet the rigorous demands of industrial usage. The systems significant energy saving features also contribute to cost and resource management, strengthening economic and environmental sustainability.
Recent Developments
The market for Gas Tankless Water Heaters, with its notable growth trajectory, continues to evolve in response to consumer demands and industry standards. One significant driving force behind this surge has been the clamor for energy-efficient home utilities, bringing about an expansive ground for innovation and exploration within the scopes of energy-saving appliances and high-efficiency water heating solutions.
December 2024 : AquaTorch Industries introduced a new line of gas tankless water heaters with AI-powered energy efficiency modules, revolutionizing the market with energy-saving solutions
October 2024 : HeatSync Co. partnered with EcoFuel, fuel cell developers, to launch a hybrid gas tankless water heater. This product combines fuel cell technology with traditional heating mechanisms to achieve optimum performance
July 2024 : GreenFlow Technologies unveiled a series of compact gas tankless water heaters tailored for small apartments and office spaces, marking a significant shift in their product portfolio.
Impact of Industry Transitions on the Gas Tankless Water Heaters Market
As a core segment of the Consumer Electronics industry,
the Gas Tankless Water Heaters market develops in line with broader industry shifts.
Over recent years, transitions such as Increased Energy Efficiency and Technological Advancements have redefined priorities
across the Consumer Electronics sector,
influencing how the Gas Tankless Water Heaters market evolves in terms of demand, applications and competitive dynamics.
These transitions highlight the structural changes shaping long-term growth opportunities.
01
Increased Energy Efficiency
The transition towards energyefficient appliances has significantly impacted the gas tankless water heater industry. With a growing focus on sustainable living and energy conservation, consumers are increasingly choosing gas tankless water heaters over conventional water heating solutions. These appliances demonstrate higher energyefficiency ratios, reducing greenhouse gas emissions and lowering utility bills, thereby making a noteworthy contribution towards a greener lifestyle. This transition has fostered innovation across manufacturers, prompting them to design and develop advanced, energysaving models that satisfy evolving consumer requirements while adhering to stringent environmental regulations.
02
Technological Advancements
The advent of technologically advanced gas tankless water heaters is another striking industry transition. Innovative features such as WiFi connectivity, remote control capabilities, selfdiagnostic systems, and multiunit setups have drastically enhanced the functionality and convenience of these appliances. Additionally, these advancements are enabling interoperability with other smart home devices, thus integrating the use of gas tankless water heaters into the broader framework of IOT ecosystems.